In the upstream production of hydrocarbons, certain reservoirs typically produce oil, while others typically produce gas and condensed natural gas liquids (NGL). The price of NGL is often close to the price of crude oil, making it a high value product. Also, the gas that is associated with the NGL is typically rich in ethane and methane and is therefore useful as a source of fuel. However, the gas is typically difficult to transport by pipeline and is typically produced in locations remote from the main areas of demand.
By liquefying the gas at low temperatures, the volume of the gas is reduced (such as by a factor of 600). This process allows tankers to transport liquefied natural gas (LNG) by sea more economically than by pipeline. The production of LNG is a growing industry, with more production plants being built worldwide to cater to the increasing demand from countries such as the United States, the United Kingdom, and Japan. The LNG process is normally located as close as possible to offshore production facilities due to the quantity of gas and entrained liquids involved. The production of LNG from a single site could exceed ten million tons per year.
The produced LNG is typically sold on a “heating value” basis, meaning there is a value in U.S. dollars (typically per million British Thermal Units or BTUs) that the LNG is sold against. An LNG production plant typically runs to a quality on either a Lower Heating Value (LHV) or a Higher Heating Value (HHV) for the LNG being produced. The heating value is often affected by the quality of the feedstock, which is fed to the process, and the operation of the processing itself. The processing of the feedstock in an LNG train can be controlled using advanced process control techniques.
The feedstock to the LNG process is often impacted by upstream operations. The normal method of running an upstream production process is to not consider the impact of the gas quality on downstream processing sites, but rather to look at the local production and to try and maximize local profitability. This choice is typically driven by how much NGL is produced from various wells. This often makes the higher NGL-yielding wells the preferential production wells, even though the gas quality may have a detrimental effect on the LNG quality.